Chapter 7 Ethical Dilemmas in Organisation Introduction Meaning and Definitions Salient Features of Ethical Dilemma Approaches and Methods of Resolving Ethical Dilemma Platinum Standards of Ethics Summary 7.1 INTRODUCTION When we talk of the problems arising in ethical decision making as discussed in last chapter, we refer to ethical dilemmas, situations in which business men face lots of choices and no clear cut right answer. Businessmen, decision makers do find dilemmas arising out of the eternal conflict between ends and the means. There are easy answers to ethical dilemmas. Some situations like whether to lie or not, stealing, cheating are easy to be answered but some situations in the practical field when there are so many choices, which seem equally arguable but represent a fake picture of neither clarity nor simplicity. Now let s make this form clear that what ethical dilemmas actually are? 7.2 MEANING AND DEFINITIONS An ethical dilemma is hard to identify as it is very specific in nature and many situational factors are embedded in it. Ethical dilemma occurs in the type of situations when one has to choose between right V/s right sorts. Some great men have defined ethical dilemma as According to Doug Wallace an ethical dilemma exists when one is faced with having to make a choice among following alternatives
ETHICAL DILEMMAS IN ORGANISATION 55 (a) Significant value conflict among differing interests. (b) Real alternatives those are equally justifiable. (c) Significant consequences on stakeholders in the situations. According to Rushworth Kidder In ethical dilemma the toughest choices are right versus right. P. Kidder says They are genuine dilemmas precisely because each side is firmly rooted in one of our basic, core values four such dilemmas are so common to our experience that they stand as models, patterns or paradigms, they are (i) Truth versus loyalty (ii) Individual versus community (iii) Short term versus long term (iv) Justice versus mercy. In general we say ethical dilemmas are complex judgments on the balance between the economic performance and the social performance of an organization. Some examples of ethical dilemmas are Ramesh Yadav was a marketing officer with a Multinational company. This company used to follow the American system of contributing equally irrespective of their designation. Once, his boss Mr. Anil Sharma invited some office employees out to lunch to celebrate Sunil s Promotion to sales manager. Each employee equally contributed Rs. 175/- for the lunch and the bill was paid by Mr. Sharma. Two days after the lunch Ramesh found out that his boss Mr. Sharma had killed the company for the entire lunch. Now Mr. Yadav is in ethical dilemma, how to handle the situation? Joseph H. Boyett and Jimmie T. Boyett have cited ethically questionable situations in business as either practices involving out right illegal activities, such as stealing of company s products/practices, misuse of power, application of personal expenses to contract budgets. But these situations offer a clear choice between right or wrong. Ethical issues are just the part of routine practice but they are characterized by less frequent by legal issues. Again dilemma contract with the way ethical issues arise because the basic characteristics are different. Dilemmas are very specific in nature and hard to identify issues generally easy to name and not specific. Assigning right/wrong, good/bad are quite easy for ethical issues but for dilemma multiple values with multiple opinion what is right for one party may be wrong for the other. The most important difference between ethical issue and ethical dilemma is when a person finds himself in ethical dilemma, he wants to do the right things but do not know what it is or do not have the capacity to do it but for ethical issue, an individual can do right things if they want to do and have the intentions.
56 BUSINESS ETHICS: THEORY AND PRACTICE 7.3 SALIENT FEATURES OF ETHICAL DILEMMA An ethical dilemma is very specific in nature and having some special and salient features like 1. Uncertain outcomes One can t he sure about the consequences result from most ethical choices. 2. Multiple choices and Alternatives Like ethical issues in which these are simply two choices yes or not here in ethical dilemma, situations are different decision makers find more than two alternatives which have to be considered. 3. Mixed consequences Ethical dilemmas and problems in management when solved the out- comes oppose to each other. One decision but considered as favorable by one party and unfavorable by another party, for example, a decision of termination of 10% workforce and increment in the salaries of remaining 90% workforce. 4. Direct/indirect involvement What will happen to particular situation in which people face ethical dilemma, one side one person is directly involved and on the other side another is just reviewing from distance and not directly involved, obviously ethical decision are more difficult to make when person, personally involved in it. For example, what would you do when your immediate boss wants from you to make false TA/DA bills and transfer the benefits to him? So would you follow him or blow the whistle against him? In both the cases you will be in problem. 5. It is a general belief that ethical decisions reduce economic profits of the company but they don t directly impact on managers salary or their other prospectus. So executives sometimes choose the path where profit margin might reduce, keeping themselves on safer sides. Thus to conclude we say that ethical dilemmas are very complex in nature. Selection of any one choice among several is quite difficult as well as risky. 7.4 APPROACHES AND METHODS OF RESOLVING ETHICAL DILEMMAS Infact there are no easy ways, approaches, methods which help practically to resolve ethical dilemma. As the degree of complexity increase, the risk to choose and apply the approaches and methods will become more. There are some classical approaches and traditional methods develop in resolving ethical dilemmas explained as follows:- Approaches to resolving ethical dilemma Utilitarian (end-based) Universalism (rule based) care-based virtue ethics
ETHICAL DILEMMAS IN ORGANISATION 57 1. Utilitarian (end-based approach) The utilitarianism system was originated by the British thinker Jeremy Bentham (1748 1832). It aims at creating the greatest degree of benefits for the largest number of people. According to this system, a human conduct is considered as good if it results in benefits for society and bad if it generates harm to the society. In-fact Utilitarianism is a special version of Teleology. Teleology emphasise mainly upon the outcomes of on individual s action and not on the intent of the individual. That s why it is called as Consequentialism or end based ethics 2. Universalism (rule based) The approach of universalism is based on the duties and obligations of an individual (Deontology). The moral worth on individual action should be judged by the intention of the person, not by the outcome of the action. It assumes that good intentions always result in good outcomes, ultimately if not immediately. Immanuel Kant (1724 1804) proposed the Categorical Imperactive One should act only in ways that one would wish all others to act faced with the same set of circumstances, and also to treat others with dignity and respect. Everyone s value is equal. Hence no one s rights should be subordinated to those of others. 3. Care-based Approach You have to reserve the dilemma keeping in mind that you have an obligation to care for those with whom you have close relationship or who cares for you. You must care for them just to maintain a strong bond in the relationship but some great-men put some argument against it that it would create favoritism while working with those you have valuable relationship as well as it can degenerate into unjust favoritism and sacrifice of own needs to care for children, parents, spouse and friends with whom you have close relationships. 4. Virtue Ethics Peter Partley (The essence of business ethics) Says Virtue ethics can be represented as a mental construction with prudence. More exactly this metal construction has two ceilings one is crowned by private prudence and the other by public prudence. The image describes how we can distinguish two sphere of excellence, public and private well being one should make every effort to gain a wider understanding of corporate private and social well being. Or In general we say that when a person follows virtue ethics that means while performing any action he/ she should develop a morally virtuous character. Methods of resolving ethical dilemmas Ethical dilemmas occur in organization in different forms, framework and structure so single unique and standard method can not be applied to resolve them. Each and every organization has its own strategies, planned procedure for dealing with ethical dilemma. Generally a committee of top level managers is being setup to select suitable approach and method to solve ethical dilemma. Some methods have been given by great men like
58 BUSINESS ETHICS: THEORY AND PRACTICE 1. Rushworth Kidder A nine steps procedure for dealing with ethical dilemma. 2. Wallace and Pakel Ten steps of decision making. 3. Laura L. Nash Presented twelve questions to address ethical dilemmas. 4. Nine steps for dealing with ethical dilemma (by Rushworth Kidder) (extract from how good people make choices - Resolving the dilemmas of ethical living, William/ Morrow, New York, 1995). 1. Define the problem and clearly recognize the moral issues in it. 2. Determine who will affect by the decisions? What would be your role? 3. Until and unless ethical dilemmas can be reduced to common issues which are though difficult but manageable it is hard to resolve them for this one has to collect the information and facts how the problem occurred. 4. Isolate the illegal issues involved in the problem by testing right versus wrong. 5. Now the time has come to make the toughest choice which is right versus right paradigms such as Justice V/s mercy Short term V/s long term Truth V/s loyalty Individual V/s community 6. At this stage you can select any one appropriate approach to resolve dilemma like Care based Rule based End based or virtue ethics ( already discussed earlier ) 7. Find out if there is any another way out of situations. 8. Decide and Act finally select an approach which you find the most suitable, decide that and take action. 9. Review of the decision Apart from these (mentioned above) methods Hosmer has given five things which should be followed to make ethical issues and dilemmas much simpler than ever (i) The decisions taken by managers must be with intense care as their consequences may affect the organization as well as the society. (ii) Ethical choices are full of mixed outcomes. One side social benefits and other side financial revenue. (iii) If you see from an upper layer you will find there are clear cut two alternatives Yes or not but actually most of the ethical issuer have multiple alternatives equally arguable. (iv) How ethical decisions and personal implications are related with each other? Mostly ethical decisions have personal implications though the common belief says ethical decisions are isolated from executive s careers.
ETHICAL DILEMMAS IN ORGANISATION 59 (v) The degree of uncertainty is very high in ethical issues, uncertain consequences with full of risks and doubts are embedded in ethical decisions. 7.5 PLATINUM STANDARD OF ETHICS Scoft W. Ventrella (Executive excellence, July, 2001) provides a platinum standard of ethics for dealing with ethical dilemma as follows : 1. Ask yourself Whose problem it is? Is it a case of conflicting interests or a question of right and fairness? In the Power of Ethical Management Norman Vincent Peale and Ken Blanchard ask: (i) Is it legal or illegal? What you are doing is in line with policy or against policy then don t do it and. (ii) How much fairness is there? If it provides benefits to few one, don t do it. (iii) At the end what is my self analysis? How will I feel about myself? 2. Does the decision accurately reflect the kind of person you are? Does your character match your decisions? Do you follow Practice what you preach? 3. Be careful and aware of what actions you show and try to imagine the situations that if all your deals, actions, phone calls being observed, recorded and further reported what would be the outcomes. 4. Keep your words How firmly you fulfill your commitment. Is it the way you make promises lightly, sometimes fulfills and sometimes not. If so then some practices will be followed by your subordinates and associates. So try to say no it you can t complete it or don t want to complete it or do not know how to do it. 5. Develop and Sustain integrity The most powerful value is integrity which is Courage (telling the truth). Self discipline and control. Goodness honesty, morality, kindness, fairness, generosity. Centering power which provides us with the navigational tools, how to pass the fuzzy ethical landscape. Living by inner truth and inner mind to remain yourself incorruptible, clean from kick-backs etc. let your mind be guided by conscience. SUMMARY Ethical dilemmas are the particular situations in which decision makers face difficult choices with no clear-cut right answers exist. Because of some special and different features like uncertain consequences, multiple alternatives etc. Managers and executives have to be very careful handling ethical dilemmas. Though some traditional methods have been developed which help decision makers to handle the complex situations and make an ethical decision.